Expect correction below 6040: Ashwani Gujral

In an interview with ET Now, Ashwani Gujral, Fund Manager, Ashwanigujral.com, gives his views on the market. Excerpts:-



ET Now: How did you observe the session today? Yesterday it was not the fall in CPI which market latched on to rather it was the weakness in rupee and a higher gold import data. Today also we saw that despite fundamentally good number, market really sold off at higher levels. Do you think that the sentiment is towards downside in the short term?

Ashwani Gujral: News is not relevant in a market. Market momentum was coming down even before yesterday. There is always good and bad news. What the market chooses to take cognisance of is based on the level where we are at. At 5500, a bad CAD would not have impacted. The market would have found some positive out of it. So basically, the momentum got spoilt. 6040-6050 is the level where the uptrend restarts. Today we tested that and closed below 6000. The fact that we have not been able to regain 6000 today is an indication that 5970-5980 may not hold for long. We should expect some correction below 6040.

ET Now: You are convinced that the market is exhausted at these levels and it is headed lower. What are the stocks which you have on your buy list and which do you think could head lower?

Ashwani Gujral: Well as long as we remain below 6040, the bias remains a bit negative. CESC is a buy with a stop of Rs 310 and target of Rs 335; Reliance Capital is a sell with a stop of Rs 365 and target of Rs 342 and Siemens is a sell with a stop of Rs 552 and target of Rs 530.

ET Now: What is your call on the index? You mentioned 6040 as a crucial level to watch out for but how would you be trading the index as well as the Bank Nifty?

Ashwani Gujral: There are two scenarios - either the index will break 5970-5980 leading to further downside or we will get back above 6040 and the uptrend will resume.

On the Bank Nifty, if we start trading below 12,450-12,500 it will lead to negativity. On the other hand if we start trading above 12850, then the tone will get positive. Today should be considered as a pause or a consolidation post large range day and we should now look for more continuation rather than reversal.